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I got a call the other day from an agent. She was angry, with cause, about something another
agent had put into our local MLS. Now, for the faint of heart, I’m going to talk about the dirty little secrets
of real estate here, and I’m going to call them as I see them. If you are thin skinned, you might not want
to read on. Here’s what happened: Agent X, from another company, put a new listing in the MLS. Under
the Buyer Agency Fee offered to cooperating buyers’ agents, he had X%**, except for three particular
agencies (which he named)—to those companies he was offering a fee that was less than X%. We’ll
call this offer of compensation Z%. I might add that X appeared to be a number that might have
represented half of his gross commission, although I have no way of verifying that. I will add that X is a
number frequently seen in my MLS as a cooperating fee offered to buyer agents.
Our local MLS pulled the listing, and hopefully slapped his wrist. Not because of what he is offering—he can offer whatever he wants. It’s just that if he wishes to alter his offer of compensation to one or more particular companies, the protocol is to notify those brokers in writing, broker to broker, e.g. “It says X% in the MLS, but be advised we are offering your company Z%”. The agent who called me said: “I can understand why he is offering only Z% to companies A and B; Z% is what those companies are offering everyone else. But our company doesn’t do that, and I don’t like us to be singled out.”
She was pretty annoyed. Before I go further, into what I really want to get to, let me remind everyone of some truisms with respect to commissions:
Ø Every state (as far as I know) requires brokers to negotiate commission rates with sellers.
Ø It is a major violation of anti-trust to talk about a commission in terms of “we charge what everyone else charges” or “we pay the same co-op fee everyone else does”.
Ø That being said, there is an incredible herd mentality in real estate. The two companies who are offering Z% both belong to an adjacent MLS, where Z% is what I have observed as being most commonly offered.
Ø If you offer compensation in the MLS, and I accept your offer of compensation by selling your property, you must pay me what you offered.
Prior to accepting your offer of compensation, I can certainly contact you and negotiate a different fee [Standard of Practice 3-3
Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation. (Adopted 1/94) ]
Ø Smart agents work exclusively with buyers and sellers; as I like to tell my students: “Don’t ever let some seller’s agent tell you what you are worth!”; when I sign up a buyer client, we negotiate my fee, and my clients know that if the offer of compensation in the MLS is less than that, we’re making up the difference somehow—either my client writes a check, or we will structure the offer with closing cost assistance coming back to my client so he can pay me the difference.
That’s all well and good, but here’s what I really want to get at: one of the dirty little secrets of real estate. Here’s what it is: even though the REALTOR® Code of Ethics says in Article One that a REALTOR® must put his or her client’s needs above all others, including his own, and even though SOP 1-12 says:
Standard of Practice 1-12
When entering into listing contracts, REALTORS® must advise sellers/landlords of:
1. the REALTOR®’s company policies regarding cooperation and the amount(s) of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non-agency capacities;
in real life, agents gloss over this. I sometimes wish, like on the old “Bewitched” TV show, we could administer a truth spell to REALTORS®. Remember that truth spell? Once Samantha, the witch put it on the mortals, they could only speak the truth—no matter how damaging it was to them personally. Imagine, if you will, a conversation with a REALTOR® under this spell:
Seller: “What’s this number here—it’s less than your commission?”
Agent: “Oh, that is the buyer agency fee our company is offering to other companies who sell your house.”
Seller: “Hmmmm—you are charging me X%--this number isn’t half of X—let me see it’s—well, it’s somewhere around 40% of the gross fee. Why is that?”
Agent: “We like to discourage other agents from selling our listings. See, I make the most money if I sell your house on my own. That’s called a double-dipper. Plus, it keeps the broker happy when we don’t share commissions with other agents.”
Seller: “Well, I really want all the agents out there working on selling my house, not just you and your company.”
Agent: “Look, are you going to be a pain about this? If you are, I’ll cave and grudgingly offer the other agents half of our commission. Of course, then I’ll put your listing in my pocket and keep it there until I show it to all my buyers. Then I’ll share it with the other agents at my office, and they’ll show it to all of their buyers. If we still don’t sell it then, we’ll put it in MLS and offer half the commission.”
Seller: “But I want my house in the MLS right away. I want it on the Internet. I want it at realtor.com.”
Agent: (Sighing!) “All right, all right. We’ll do it your way, but I won’t be happy about it. I may have to not
return other agent’s calls about showing your property so I can try to sell it myself.”
[Let’s violate another one: Standard of Practice 3-8
REALTORS® shall not misrepresent the availability of access to show or inspect a listed property. (Amended 11/87) ]
Seller: “I don’t understand! I thought you wanted to sell my house quickly, at the highest possible price, and with the best terms and conditions for me.”
Agent: “I said that, but I don’t mean it. I really want to sell your house at the best price, terms and conditions for me.”
Wow! How scary is that! But here’s the bigger question—how true is that? You see, I’m fairly convinced that few agents sit at the listing presentation and actually explain company policies as they should, in accordance with SOP 1-12. Yet here we are, in a tough market in many parts of the United States, and instead of doing everything possible to sell listings, some agents are still putting greed ahead of their client. Ask yourself this: if you were a seller, and you really understood the process the way we do, wouldn’t you want your property to be made as appealing as possible to all agents, especially buyers’ agents? What do relocation companies do in a tough market? They ask the agent what the ‘prevailing commission rate’ is (their term, not mine). They then tell the agent they will pay a fee in excess of that rate, and instruct the agent how the fee is to be split. Guess what? It always amounts to an incentive for a buyer’s agent.
Here’s my final point: we are in a sea change in our business like I’ve never seen before in my 33 years in the business. Consumers know more and more everyday about what we do, how we do it, and how we get paid. How in the world are we demonstrating our value to the consumer if we insist on playing games that benefit only us?
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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“Come and listen to my story ‘bout a man named Jed, poor mountaineer, barely kept his family
fed.” I can’t get the theme song from “The Beverly Hillbillies” out of my head these days. What’s
putting it there is all the hoopla and activity in Lycoming County (and Tioga, as well) over natural gas.
The gas lease folks have been diligently tracking down owners of land, trying to sign them up for
leases. There are rumors of large ‘signing bonuses’ and royalty payments in excess of 15%. It has made
our once quiet county courthouse Recorder’s Office a hotbed of activity, and there are rumors Mrs.
Annabel Miller, the Recorder of Deeds, actually had to tell some of these folks how to behave. (!) New
computer terminals were added; and the title searchers who work there all the time mutter about
books being misplaced, some say on purpose. All the gas company representatives are looking for the
same thing—parcels of land, the larger the better, which still have gas and oil rights intact. That in and
of itself is interesting—the title searches go back 150 years for this stuff, and I am told that on several
parcels, the rights have been sold or leased more than once. Whoops!
Why here in north central PA? Well, we sit on Marcellus black shale, which runs from the southern tier of New York into West Virginia. According an article online from Penn State University, the Marcellus shale could (optimistically) contain 516 trillion cubic feet of gas. The other attractive part of the Marcellus shale is that there are fractures in it. The fractures allow drillers to drill vertically, but then branch off horizontally, and this is considerably cheaper ($800,000 versus $3 million), according to PSU geoscientist Terry Engelder. The article I found you can read as well, at: http://live.psu/edu/story/28116. The big news locally, and of interest to you and me, is what it is doing to our real estate market. There are rumors on top of rumors about lease prices, sale prices, estimates of royalties, etc. I can affirm that I know of two sales that were upset at the last minute by an owner deciding maybe he didn’t want to transfer those rights. A parcel priced for $190,000 one day jumped in asking price to $5 million after an oil and gas company rep talked to the owner. So, owners are sitting tight, preferring to gamble on the future value, rather than sell today. Yet a broker friend in the Northern Tier asked my husband a good question: “Has anyone actually seen someone with a big check from a gas company yet?” I haven’t personally; yet some reliable people I know claim to have. Brokers and appraisers with a grain of sense are refraining from trying to value these rights; just last week I appraised a 40 acre farm for an estate. Thankfully, the decedent had already leased the mineral rights—but I had told the executrix going in: “I don’t value minerals, gas, oil, or timber.”
Of course, we are all optimistic. We’d love to have several Jed Clampets right here in our backyard. The Mr. Drysdales of the region would be thrilled—they already are. Local banks, local law firms, local stock brokerage companies are all busy offering seminars about gas leasing and how to handle new found wealth. The attorneys have taken a page from the REALTOR® playbook (“When the market changes, find another niche”) and some who last year were divorce or elder care or criminal experts, this year are gas lease experts. A full scale gas exploration and pumping operation could pump gas out of the ground and money into the local economy. One rumor says there are plans to build a pipeline from here to New York City, employing 30,000 people at $35 per hour and up—and once the pipeline is there, it will pump for 100 years! Who knows? I don’t pretend to be a geologist. I do know as a REALTOR® and an appraiser, that we can’t begin to estimate the effect on value of these things until the dust settles. We won’t know the value of these rights, as it affects market value, until we can observe parcels sold with and without the gas and oil rights. Another appraiser friend has done some research and tells me Pennsylvania law regarding oil and gas rights is light years behind other states; that here in PA you could actually have the gas pumped from under your land, by a well located on an adjacent parcel, and get little or no compensation. If you have a large tract, and you haven’t signed a lease, I would say: “Do your homework.” It appears that this situation is just continuing to snowball, so you probably would not lose by waiting. There are some owners who signed leases last year for under $1000 an acre who are now watching their neighbors sign leases for $2500 an acre. As in any market, timing is everything.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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I just finished doing a day and a half of board orientation for my local association of REALTORS®, West Branch Valley. Our association is small (about 240 members) so we do this every six months. Despite our efforts to orient new members as soon as we can, there were some in the class who had been in the trenches at least a year, or even more.
New people come into our business with much hope, great expectations, and, sometimes, an unrealistic picture of what the business entails. Here in my state of Pennsylvania, if one hundred new agents are licensed on January 1, by December 31, fifty are gone. By December 31 of the following year, another twenty-five are gone—leaving us with 25% of our original group. Yet, year in and year out, hopeful new agents show up at orientation. Some of them do make it. They show up at other classes, and the smart ones figure out pretty quickly that Fundamentals and Practices gets you through the test, but learning how to list and sell real estate is something else entirely—and it calls for ongoing education, as well as a lot of on the job training. Even the ‘seasoned’ agents like me (30+ years and counting) learn something new everyday.
I asked my students this time to tell me what they had learned in orientation that they didn’t know; and what they would also like to learn. Their answers were interesting. My portion of the orientation is Code of Ethics, plus general REALTOR® information, as well as a quick review of our most popular standard forms (Agreement of Sale, Buyer Agency Agreement, etc). For the past several years, I’ve quickly gone through a slide show of pictures taken in my years as an agent and an appraiser—because the one thing I find, everywhere, all the time, is that when I ask new agents: “Has anyone ever taken you out into the field and shown you how to look at a house?” the ‘yes’ answers are 1% to 5% of the attendees. Stupefying, isn’t it? My slide show is very basic—things to look for, building materials, what an asbestos roof looks like, and wears like, compared to a composition asphalt roof. Most of the attendees said that they learned a lot about the Code, including arbitration. One person honestly said: “I didn’t know anything about Ethics before?” (Are the brokers reading this hearing that?) More important, if you are a broker, are the things we don’t cover, and they want to know. Here’s a list of the highlights:
§ Multiple offers and what you do when they come in
§ Financing (several students cited this)
§ Agency
§ Electronic advertising, including craigslist
§ Anything electronic or Internet based
§ More information on web site stats—how effective is a website, what percent of people search online
Several said they were glad I showed them realtor.org and parealtor.org, which are membership websites; one was glad I told them about District Conferences and our Triple Play Convention.
Here’s my point, and it is directed mostly to the brokers—the people that hire these fresh new agents, full of hope, desire to earn money and do well, ambition to have a better job than the last one—please—start doing your part. You see, the educators like me can’t do it all. Oh, I shamelessly promoted GRI, ABR and SRS courses at orientation—I always do because I think those designations are the most valuable to a new agent. I told them when the next CE cycle comes around to use their ‘butt time’ wisely by taking a course that will help them sell more real estate. I directed them to our District conference (this year my conference’s keynote speaker is Terry Watson, and if he can’t energize you, you’re dead!) and to the Triple Play Convention. I told them they can attend state or national REALTOR® meetings just because they are REALTORS®. But, I can’t do it all. Quit hiring these people if you don’t intend to train them. If you don’t have a mentoring program, why not? Can you really afford to lose 75% of the people you hire and train (and train seems to run the gamut in our business)? In other words—our market is tougher, and our business calls for more professionalism than ever before. If you are a broker, the buck stops with you. So please—do your job—and by the way—if you send them to an educator, we’ll do our job, too.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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I just returned from the annual Memorial Day Services at our local cemetery, in my little town of
JerseyShore PA (situated in north central Pennsylvania). This year's services were poignant. My favorite
uncle,Jim Mercury, passed away this past March. Uncle Jim was a proud Navy reservist, and a "Tin Can
Sailor" who served in both the Atlantic and Pacific during WWII. For many years, he was an active
participant in the annual Memorial Day services. This year, the Veteran's Council presented a plaque in
honor of him to my cousins, his sons. Memorial Day was always important to my Dad, an Army Veteran,
gone now since 1996, as well as this uncle and many others. As a young person, I spent what seemed
to me to be waytoo many Memorial Days marching up a steep hill in the local high school band,
sweltering in a black wool uniform and standing through what seemed to be interminable speeches. I
haven't been to a service for many years, although, like others in my small town, I make sure all the
family graves are adorned with flowers and looking their best---remembering that this holiday was once
"Decoration Day". It was a shock to see how aged so many of the veterans participating looked. And, of
course, the WWII vets are dying daily. Even the Vietnam Vets (my generation) look older, receding
hairlines, paunches, and (on two) still the long ponytails, under the military cap. I was seated near a
grizzled veteran of WWII and Korea, who muttered under his breath about that 'long hair'. I wanted to
turn to him, and remind him (gently) that regardless of the hair, or lack of it, they are there--just as a
few young people in uniform were, scattered through the honor guard. I saw the Mother of a young
man from our church, killed in Kosovo. I admired her for her ability to endure yet another service. She
too was there, giving witness to her history.
Today's service was beautiful. It was quintessential small town--small towns do these things so well--
complete with a combined band--greyhaired former band members mixed in with high school kids, all
wearing (to their relief, I'm sure) polo shirts and pants. The sky was blue, the temperatures were in the
60's, the birds sang and the sun shone. I'll spend the rest of the day doing what I like best--puttering
in my garden, cooking a relaxing meal for my family...but remembering that I can live here, in these
United States, and pursue the career I want, as a female, live the way I wish, worship as I please,
dress as I please, vote for whom I please...because of the sacrifice of so many. Happy Memorial Day!
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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It's the end of the real estate agent CE cycle in Pennsylvania, and probably not a minute too soon.
Speaking for myself, I'm tired of hotel rooms, car trips, restaurant meals, and (sometimes) having to
point out that during CE, returning emails on your smart phone is not allowed. The providers are burned
out too--they all offered lots of courses back in January and February, which were sparsely attended, and
in some cases, cancelled due to low turnout. Now it is May; license renewal is by May 31st, and everyone
woke up about 5 weeks ago and said: "Gee, I need my CE!" Classes are pretty much full, and I've had
students show up with colds, flu, and broken bones, just to get the CE done in time. The variety of
courses offered is great; as usual, some students opted to get the least expensive 'butt time' for their
fourteen hours and paid little, expected less, and hoped they would get out early. So I hear--those are
not my classes. My providers (the schools and associations who hire me) charge reasonable rates, but
both the providers and I have high standards. And no, there is no getting out early.
Tomorrow I'll be teaching the REBAC eBuyer course, which I just re-wrote with Amy Chorew. It's a fast
and fun 7 hours, very informative and full of ways for agents to improve their business. And not a
moment too soon--according to Inman News, NAR just unveiled their annual report about agents and
income--the bad news is in--agent income is down. Experienced agents, NAR reports, make more money.
That's no surprise to me. I teach real estate in a state, where, if we license 100 people on January 1, by
December 31st of the same year, 50 are gone. By December 31st of the following year, another 25 are
gone, leaving one quarter of our original class. With those odds, you would think new agents would be
hungry to learn all they could---and some are. Sadly, some aren't. They were seduced into this business
by a fantasy--real estate agents drive around in immaculate, late-model cars, show beautiful, well-kept
homes owned by very reasonable sellers to equally reasonable buyers--and then get to keep every
penny of the commission. If you are in the business, you know how far off the mark that is--this is a
tough business. Some REALTORS drive trucks and Jeeps; some houses are more like hovels; some
sellers are downright unreasonable--and some buyers are worse. And finally, after splitting with the broker
and any co-op agents, and paying your own taxes, your own health insurance, your own gas, your own
signs, business cards, MLS dues, etc.--well you get to keep some of that money. So every CE cycle, I
ponder the same things over again--if agents have to take 14 hours of CE anyway--why aren't more
of them taking courses that could actually help them be better at their job? Why aren't they showing up
to learn to price, to learn to market, to learn negotiation, etc. Why are they stuck in the mold of
taking courses whose titles they can't even recall? In defense of my best students, they aren't all
on this page. I have some great students who will be in class this summer and fall--taking designation
courses like ABR, GRI, SRES, SRS--and getting a 'three-fer' here in PA--broker credit, CE, and part or all of
a designation. Those folks never worry about getting their 14 hours--they always have more than their 14
hours. That's because, even if they have their CE, if a good course comes around--they take it--on the
chance that they'll learn more....and earn more.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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Yesterday was a political junkie’s dream come true. We had massive chatter about what to do about
Michigan and Florida’s mishandled primaries; we had Eliot Spitzer get caught with his pants down
(sorry, I couldn’t resist), and Silda Spitzer singing “Stand By Your Man” (she must have taken lessons
from Hilary Clinton). Of course, we also had the spectacle of what happens when the geeky brainiac
girl thinks the hot jock will actually go to the prom with her, as demonstrated by Barack Obama’s
emphatic statement to the world at large, and particularly, Hilary Clinton: “I am not running for Vice-
President!”
As a Pennsylvania resident, it is both amusing and bemusing to find out that after a 30+ year hiatus, my state will ‘count’ again. And, as I look at the mess in Michigan and Florida, caused by the Democratic National Committee and Howard Dean, I’m reminded of Will Roger’s quote: “I don’t belong to an organized political party; I’m a Democrat.” This is to the backdrop of Al Sharpton singing his theme song of “It’s Not Fair”. The idea that the voters in these two states should shoulder the cost of another primary is absurd. For whatever reason, the Democratic leaders thought Iowa and New Hampshire were sacred cows when it came to early primaries and no other state should mess with that. I guess they missed the day in Civics class when the teacher covered states’ rights. All of these demonstrate the strong need for one national primary day, get it counted, get it over with, and let us move on.
However, as a REALTOR®, many thanks to the Democrats, the primary process and Mr. Spitzer—you have kept the media’s attention away from real estate. This is a true blessing, because when the talking heads start to chatter and bobble, they can talk themselves into just about anything.
I just did an ePRO seminar yesterday in Westchester County, New York. I asked the students: “How’s your market?” Remember, kids, real estate is LOCAL, despite what those folks on TV would have you believe. One student said her company sold more in 2007 than in 2006, and she is ‘very busy’. Another student said it was ‘slow, but not as bad as some times’. Yes, there are pockets of the country that are hurting—the overbuilt places, the ones where they took double digit property inflation as a given, and the pockets where the local economy is bad. And, it isn’t over yet. But—there are some real bargains out there in real estate land, and some buyers are beginning to wake up to that.
In the meantime, I have fervent hopes that politics and sex will continue to distract the media from our business, real estate.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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I was starting a class today when one of my students asked me: "Is it true that this market is the worst
it's ever been? There are agents in my office who have been in the business 20, 25 years, and they are
saying this is the worst they've ever seen the market." I said, unequivocably: "NO! This market is not
the worst I've ever seen, and it sounds like the agents you are talking about have been sitting down
and 'drinking the Kool-Aid' with the news media." With all due respect to the third estate, bad news
sells; good news is a yawn (most of the time). Additionally, trying to quantify the entire real estate
market across the United States is like trying to give a national forecast. What would you think if you
turned on the weather, and the weatherman said: "It'll be cloudy today, mostly sunny, high of 90, low
of -10, showers likely, snow up to 4 feet, followed by freezing rain and tornadoes." You'd think the guy
was out of his mind! And you'd be right! Real estate markets are local in nature;not only are they local,
but within any given market area, there is usually a lot of diversity within that market.
My real estate students intinctively understand this when we talk about it, and I ask: "Do you have any
price ranges where you can't keep inventory? You still have more buyers than houses? What about
another segment of the market? Do you have a segment where sales are sluggish, because you have an
oversupply?" They nod in agreement, and here is the 'Aha!' moment--when I ask: "Do you have any
sellers who have a house to sell in that price range that is moving quickly...and they want to move into
a price range where sales are more sluggish?--it doesn't get any better than this--you get to sell in a
sellers' market, buy in a buyers' market, and finance at historically low interest rates." In my market--
north central Pennsylvania, primarily Lycoming and parts of Clinton Counties--are markets are not bad.
In fact, they are nowhere near as bad as I have seen them on other historic occasions. Some of our
price ranges are saturated and have an oversupply; one of the upper price ranges in Lycoming County
has a three year plus supply listed. But, some price ranges have a six to nine month supply listed;
which, going into the spring, isn't that bad. So...don't sit down and drink the Kool-Aid just because
someone asked you to--check out your facts first, and then you be the authority
in your own market.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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Pricing real estate has never been a more important skill than it is today. Yet, when I stand in front of a room full of students, I can tell by their faces that I'm the first person presenting basic fundamentals of pricing and valuation to them. In many states (including mine, PA), the day we give a real estate salesperson's license out, we empower that person to go out the very next day and price a home for sale! This is scary--one of the reports I read within the past week was the case of a disgruntled homeowner suing the agent for allowing them to pay too much for the home. In virtually every state, pre-licensing real estate courses are 'taught to the test'--in other words, instructors teach what students need to know to pass the test. Yet, virtually any new agent you talk to will agree that the courses did not tell them how to actually sell real estate. Never has education and training post licensing been so important for an agent's success. The course I taught last week was a CE course I wrote, entitled: "What's it Worth?" As I type this blog, I'm in a hotel room--tomorrow I'll do a GRI "Pricing and Evaluating Real Estate". Here's my point: if you are a new agent, a seasoned agent, or even a successful, seasoned agent--you can never learn too much about anything--including pricing and valuation. There is an old adage in real estate: "A property priced properly is half sold already." Pricing property properly for a seller leads to satisfied clients and listings that sell. Pricing property improperly for a seller usually leads to frustration on both parts--you can't sell it, they won't reduce it and everyone gets to be miserable. Pricing property properly for a buyer leads to satisfied clients that will return to you to sell the home, because you didn't let them overpay--or if they did overpay, you told them they were! Allowing a buyer client to overpay for a house is not only a violation of your fiduciary duties to your client, it's a stupid way to practice real estate. I've written several articles and courses on pricing property, and I've got a new course in the works right now. If I'm not in your neighborhood--find a qualified instructor and course near you and figure out how to do this right. And, if you are a consumer, it goes without saying that you ask the agent several direct questions: "How will you arrive at a price for our home?" "How long have you been in the business?" If not long, ask: "Is there someone at your office with more experience who will help you price my home?" "What factors do you consider when you price a home?" "What homes are competing against mine?" "What is the average list price/sales price ratio in my segment of the market?" "What are the average days on market?" By the way, if you are an agent, and you can't answer these questions--you better learn how!
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, SRS 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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Well, it is almost the end of January, and so far, I've kept some resolutions (hooray!). One of my resolutions this year was to keep better records. This was precipitated by the fact that we had to file our federal taxes late (we got an extension) because my husband had an emergency appendectomy just before tax time. Plus, I found I was often puzzled with the question: "Where did all that money go?" I'm combining low tech and high tech. Low tech: I have a small notebook I carry with me everywhere which slips into a clear plastic case which closes and holds loose papers. In there go all the receipts as well as notes, e.g. cash, credit card, ATM, reimbursed, non-reimbursed, etc. High tech: I have done an Excel spread sheet where I'm recording the same data. My late mother-in-law, for all the years I knew her, lived very frugally, and always recorded every penny she spent. I can't honestly say I'm recording every penny, but it is enlightening to see where the money goes. I'll let you know next April (2009) how it ends up working for me! On a more sobering note, I have to think that my generation (Boomers) would be going into retirement in better shape if we had ended up with the same financial values as our Silent Generation and GI Generation parents. As we teeter on the edge of a recession (or so the economists are predicting), it occurs to me that in a country where 40% of the population doesn't remember when someone named Bush or Clinton wasn't President of the United States, we certainly have a lot of people who don't have any memory of 'hard times'--or even stagflation. We are careless with our money in our culture. We spend more than we earn; we have too high balances on our credit cards; our national savings rate is close to zero. . .and many Americans have bought (and borrowed for) way more house than they could reasonably afford. As a long-time REALTOR, I can remember when we used to print off an amortization schedule to give the buyers at the closing--we would then show them how to drop down to the next month, and make a principal payment, thus saving hundreds of dollars of interest, and paying the loan off early. (For newer agents: the bi-weekly mortgage hadn't been invented yet. ) We passed on to our clients the goal of owning their home free and clear--as soon as possible. We promoted a home's investment value based on the premise that a buyer would pay it off, keep it paid off, and thus (some day) go into retirement with a nice asset. A huge part of the mess we are in now is because people speculated in real estate. They bought property expecting that double digit appreciation would continue indefinitely, and the plan was to sell and get out, take the profits and run. Obviously, it didn't work that way for a lot of people. And, on top of that, they weren't speculating--or gambling (let's be honest) with 'mad money'--they were betting the family home. As REALTORS, let's encourage financial responsibility with our clients. Let's not urge them to buy more house than they can afford. Let's show them the benefit of paying a mortgage off early. Let's emphasize that the family home is many things--but a vehicle for speculation and quick profits is not one of them. let's urge everyone to get a little notebook and start figuring out where their money is going--and maybe resolve to save more of it.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES SRS, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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My state legislature (Pennsylvania) is currently kicking around a number of ideas for property reform, including an amendment to the state constitution outlawing the use of real estate taxes to fund public schools. Apparently, the $1 billion dollars Governor Rendell promised we would get from slots and use for schools hasn't quite materialized. In some parts of the state, school taxes are quite high--several thousand per year. The spending per student varies widely, from as low as under $2000 per student per year to over $21,000 per student per year. It sure doesn't look very equal. We have 501 school districts in Pennsylvania, each one ruled by a local school board. The persons elected to school board range in intelligence, talent, and dedication from Moe and Curly to the caliber of a Andrew Carnegie, or possibly a Henry Ford. Some folks manage to get themselves elected to school board to right an old wrong (real or perceived), get their family members jobs in the district, or just grind another axe. A product of what was then, and still appears to be, a fairly decent public school district in Pennsylvania, I went on to college and majored in English Literature. It is my study of literature, and Charles Dickens in particular, that causes me to cynically say that I cannot ever envision my state (or any other state) eliminating property tax as a source of revenue for anything. Various Dickens characters, including some in Great Expectations referred to 'portable property'. Portable property was, and is, just what it sounds like: property you can move around with you. Easy to conceal in many cases (some extremely valuable items, like gems and precious metals are quite small), and therefore hard to tax. Real estate, on the other hand, is really hard to hide. I'll never forget a great story I got from a student in an appraisal class several years ago. As an icebreaker exercise, I told everyone, as they introduced themselves, to finish this sentence: "The weirdest thing I ever saw while doing an appraisal inspection was...." Well, the weirdest thing for Phyllis Riccadonna, from Elk County PA (if you don't know where, it's at the end of the world--turn left), who went out to do an inspection and couldn't find the house. She searched and searched, finally asking a man sitting in (what else?) a pick up truck next to a metal storage building where so-and-so's house was. "Right here" he replied, taking her inside the metal pole barn, where a complete ranch home was located. "I'm not paying taxes on a house" he asserted. Well, the roof on that place would probably not wear out...and it might be great house for someone who works third shift and wants darkness at noon...but back to the point--real estate is just too darn attractive for taxing bodies. It's there, it can't be hidden, ownership records are for the most part public--it is a tax collector's dream. So, although I'm watching the debate in my home state with interest....I don't think it has a 'dickens' of a chance.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, SRS, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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It's the end of December, so it is resolution time. As I ponder my personal list, which includes finishing my book, doing more convention speaking, blogging more often, and reading at least one business book a month, I find myself wishing I was in charge of other people's resolutions. Call me cranky; maybe it's because my birthday falls in early January and as a Boomer, I'm now on the other side of fifty. But, if I were in charge of other people's resolutions, here's what I'd resolve:
That people with cell phones use them judiciously, not in public rest rooms, not at the top of their lungs, and that when I'm in earshot they would avoid personal topics, including (listen up, Realtors!) putting together deals with financial and other personal data.
That the various real estate commissions and agencies which approve real estate education, both online and live, would resolve to make the process quicker, easier and friendlier for course writers.
That the next time I attend a wedding, bar mitvah, college reunion, or other event where I would enjoy talking to the other attendees, that the band would resolve to keep the decibels somewhere low enough to allow this.
That just once in awhile, a Realtor asking about a topic would resolve to not say: "But do we get CE credit for this?" Some things are just worth learning, regardless of CE.
That the airlines would resolve to be honest with passengers about delays and cancellations, and not string hapless passengers along for hours, until finally shuffling us all off to indescribable hotels (and I do mean indescribable!)
That the Appraisal Institute would resolve to make its peace with NAR, and rejoin the Realtor Family. Appraisers need the political muscle NAR can provide, and I'm afraid appraisers may be set up to take some of the grief from the mortgage debacle playing out.
That real estate agents would resolve to understand and practice agency--on both sides--buyer and seller. If you don't get it, take ABR and SRS--and get it!
That politicians would resolve to stop their posturing, finger-pointing, name calling and blaming and actually solve some problems.
As you can see, I've now ventured into Fantasy Island! Happy New Year to all and good luck with your resolutions--whatever they may be!
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRS, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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It's early December, so we're back at Triple Play, the New York-New Jersey-Pennsylvania Convention, held the first week of December every year in Atlantic City. It's 'old home' week for trainers; even though many of us saw each other just before Thanksgiving in Las Vegas for the NAR conference. What seems to be on agents' minds? Well, I had over 500 students show up for my session: "Flips, Frauds and Foreclosures". The state of the lending side of the industry, as well as the fall out from the sub-prime loans, is on everyone's mind. Lots of agents seemed to be interested in technology courses and how to integrate technology into their businesses. The trade show floor was about the same as last year, but the number of lenders seemed lower. Many Realtors® I talked to anticipate agents leaving the business by the end of the year. One AE I spoke to has prepared her Board of Directors for a loss of 10% to 15% of their members. I spent some time with Dawn Headtke at the ABR booth, and Steve Caspar at the SRS booth. Both courses are in my top five of faves to teach. There's never been a greater need for agents who understand their fiduciary and statutory duties to their clients; and it seems like there's never been as many blatant examples of agents who just don't get it. In my home state of Pennsylvania, we're in a CE cycle for agents; they renew their licenses by the end of May, 2008. I'm hoping that those agents spend their time wisely, taking courses that will be a double or triple hit--CE, designation credit, broker credit, or an elective towards a designation. For those who like education while wearing their jammies, let me remind you that e-PRO will be totally revised come the first of the year. Remember, I'm an e-PRO trainer; contact me for a discount--it is approved for CE in Pennsylvania. I had lunch with my friend and colleague Amy Chorew; we hope to wrap up our re-write of the eBuyer course for REBAC by the end of this year. This convention is my next-to-last educational 'gig' this year; my December is very busy with my son's college graduation this month. Wishing all a wonderful Chanukah, Merry Christmas, Happy Kwanza, and a successful and Happy New Year.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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I've been watching, bemused, as a consumer and a real estate agent dance to the same old steps of real estate, only without figuring out that the music has changed. The consumer is someone I know, who knows I'm a real estate educator. He is probably more candid than he should be with me. For instance, he freely admitted his opening list price was aspirational (my word, his meaning). He insisted on a short listing with the agent, and that more commission should go to the buyer's agent. A good thought, but the bonus is tied to a certain price, at a certain time. Supposedly, if he gets less, or later, no bonus. He also has a set up where his listing agent has to be present for all showings. In less than two weeks, he has already reduced the price. The steps are old. Real estate in today's market means listing it at the right price to start with. If the seller wants to take some money off, there are at least three better ways (that I can think of) to spend the money than just a reduction. One would be to buy down the interest rate, a second would be to pay some closing costs for the buyer, and a third (since this is a move-up house) would be to offer to pay the buyer's existing mortgage payments for 3-6 months. Alas, he isn't doing any of this, and neither is his agent. There is an eighteen month supply in this market for homes in this price range; why make it any more difficult for a buyer's agent to show the house ("Listing agent must be present for all showings") Then there's the term on the listing--90 days, per the owner, starting in November. In North Central PA, November begins the slowest three months in the real estate business. Yet, he and the agent are engaged in old dance steps---ones that probably won't get them to closing. The agent is letting the consumer call all the shots; and they are pretty much bad ones. The consumer, who purports to want his house sold, is insisting that the agent do it 'his way'. Same old, same old doesn't work anymore. Successful agents have a marketing plan, and they don't take listings if the sellers don't understand the difference between selling a house and marketing it. Successful agents also know that they are successful because they know what they are doing--and if someone asks them to dance this number, they just sit it out.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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Last week, the Department of Justice started their own web site for consumers. Among other things, consumers can click on
a state (displayed in a map of the United States) and find out if the state offers choices for consumers, and if the real
estate agent can rebate 'some or all' of the commission back to the consumer. DOJ and NAR have been locked into a battle
of wills on a couple fronts for some time. The DOJ is of the opinion that consumers do not have enough choices in terms of
services (or minimum) services that licensees provide, and that 'minimum service' laws are contrary to the consumer's best
interests. NAR, and many licensees, feel that real estate is an infrequent transaction, and that consumers are best served
by having an agent who has minimal levels of duties and responsibilities to him or her. My observation today, short and
sweet: all the license laws we now have were enacted, originally, to protect the consumer. We have lots of choices for
consumers in our industry; and I think most agents provide real value for their clients. Our industry is no more perfect
than any other, but before we decide that the answer is less responsibility and fewer duties, let's consider what benefits
the consumer. Can the average consumer price a home correctly (with or without Zillow?) Can they negotiate? Are they able
to complete the paperwork needed for the transaction? Can they protect their own interests? Or, does the average consumer
need a fair amount of assistance for a very complicated process with multiple players?
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I'm a 'road warrior' teaching real estate classes all over the United States. Because of this, I get a very
good view of how hotels, restaurants, airlines and other travel related industries provide customer service. I've seen the
good, the bad, and the ugly. The more travel weary I become, the more I realize that the travel industry, not unlike the
real estate industry, has gotten to the state where minimal customer service is now often considered to be the exception,
and is gratefully accepted. Yet, in this sea of mediocrity, there is an occasional bright spot of true customer
service--someone really trying hard to do their job right--and make the customer (me) happy. Often, my choices are
limited. I live in rural Pennsylvania, so air travel for me is very limited, and I do not have a wide choice of airlines.
Many times, either the people who hired me are putting the class on in the hotel, and that's where they put me up, or they
pick a hotel (usually based on convenience, and price). If I get to pick a hotel, I pick based upon proximity, my
familiarity with the brand, and whether or not I have accumulated enough points in that particular brand's system to get a
free night. I like to think I'm fairly easy to please. Clean sheets & towels; peace and quiet--and good, free
Internet. It's surprising how some fancy hotels are still charging for Internet service. All of these musings about those
industries have gotten me musing about our business--real estate. So here are my thought provoking questions for us all
(me included). If the consumers in your area could pick a real estate agent from anywhere at all, would they
still pick you? Do you offer the bare minimum for the easy to please consumer--clean transactions? Transparent services?
Easy access? Do you charge extra for things the consumer thinks she should get for free? Do you have a brand? What is it?
What does your name, your company name, your franchise name (if you have one) say to a consumer? Do you offer incentives
to your customers to keep coming back? Are you providing the bare, minimal customer service--or are you, on a daily basis,
offering more?
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As we all watch the sub-prime market crash and burn, we need to recognize that there is enough blame to go around. More
than enough. The federal government is in the process of dreaming up ways to help solve this problem, but a big part of
this problem is unadulterated greed, followed by stupidity and laziness, although not necessarily in that order. Let's
start with greed. The predatory lenders had more than enough of this to last a lifetime. Many consumers, and agents, were
blissfully unaware of predatory loan practices such as yield spread premiums. This is a practice where the loan originator
gets a bonus for selling the consumer a product with a greater yield to the investor--good for the investor, bad for the
consumer. There are some fine, upstanding mortgage brokers out there. There are some bad ones, as well. Some of the
companies that have failed, like Ameriquest, deserved to. Ameriquest, after all, entered into a huge consent agreement in
my state (Pennsylvania) as well as other states when their predatory lending practices, including pressuring appraisers,
were revealed.
Then we have the investors on Wall St. The underwriters packaging mortgage backed securities for resale were greedy also.
Per the Wall Street Journal, back in 2000, Standard and Poor decided that 'piggyback mortgages' --80/20 loans where the
consumer has none of his own money in the deal were no riskier than regular loans. What were they thinking? In 2006, some
genius at S & P finally decided to check it out, and found that the foreclosure rate was actually much higher on these
loans. DUH! At this point, they changed the rating, but the damage was done. Then, there's the consumer. Did none
of these people ever hear the expression that begins: "If it sounds too good to be true..."??? Instead, we had lots of
consumers who blithely took loans out with teaser ARM payments who never asked "How high can my payment go? How soon?
What's the worst case scenario? Is there a pre-payment penalty on this loan? How much is it?" Finally, there is blame
enough for the agents to join in. There was a time in this industry when agents were much more hands-on with respect to
their client's financing. Real estate agents actually pre-qualified buyers themselves, running their income and debts
through a worksheet, applying the appropriate ratios (different ones for FNMA, FHA and VA) and told the buyer what he
could afford. The agents also recommended lenders, and were knowledgeable enough to compare products. We've gotten lazy.
We hand them over to lenders and say: "Call us back when you have a loan." Instead, we should be doing our own
pre-qualification, giving the buyer questions to ask, and helping them to compare loan products. Should the Feds bail us
out? On the one hand, we have hapless consumers who may lose their homes. On the other hand, you can't fix stupid. I'm in
favor of very limited support--options that would help homeowners refinance, but would not make other taxpayers
essentially pay off their ill advised mortgages for them. As far as the predatory lenders go, they are getting what they
deserve. In many states, no license is needed to be a mortgage broker. That's something the Feds should fix. The FBI has
gone on record as saying that the reason we have so many predatory lenders out there is that a business that generates as
many billions of dollars a year as the mortgage business does has, and is, attracting career
criminals. You know--former drug dealers. After all, rarely do mortgage brokers get shot when a deal goes bad. The
sophisticated Wall Street crowd certainly knew they were blowing smoke when they decided 80/20 loans weren't risky. They
deserve to go without their six or seven figure year end bonuses. Sadly, some investors at the end of the food chain are
already being affected--those securities were bought for them and put into portfolios. And, as far as the agents go, we're
due for a correction in our ranks. There are a lot of agents out there who are going to leave the business--and many of
them should. They aren't competent; they aren't prepared for the market we are in, and it's way too much like work for
them. Bye-bye--this is a serious business, and be in it to not only succeed, but to serve the consumer. If you can't take
the time to learn about financing, or learn to qualify buyers, then leave now. Let's strive to get our industry back on
track from the inside out. We need to be competent, and we need to identify competent lenders we can honestly recommend to
our clients. We need to understand that not all consumers can be home owners, and some that can be someday can't be today.
We need to take charge of our business, and move forward.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training,
speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To
contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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Date: Sep. 22, 2007
Tags: None
September is almost gone, and it has been a wonderful month. My
daughter and I started the month by going to NYC to see "Wicked"--
a belated birthday gift for my Leo daughter. Super show! That was
Labor Day Weekend, and since then, I'm 'back in the saddle
again'--or, in my case, back on the road. I got the
chance to teach the RSPS (Resort and Second Property Specialist)
course in Georgetown, DE (near Lewes and Rehobeth Beaches). My
husband went with me to take the course--this is one of his
specialties--and we enjoyed a day at the beach. We sure missed the
boat--back when our kids weren't in school, we should have done the
September beach trip--the water was warm and the weather was
great--not too hot. The kids are pretty much out of the house, so
we'll probably become dedicated September beach goers. Met some
great Realtors at that class with terrific ideas. Since then, I've
been to Butler PA, Wilkes-Barre PA, Allentown, PA, New Kensington
PA, ...etc. October brings Nashville! In the meantime, I am
collaborating with my good friend and colleague, Amy Chorew (aka
The Tech Goddess) to re-write the REBAC eBuyer course. Life is
good! Finally, the seasons are changing here in Pennsylvania--the
days are shorter, the mornings are crisp. When I walk my yellow
Lab, Sandy, across the farmer's fields we see fog in the morning.
The farmers are bringing in the field corn and soybeans. Some days,
the tractors have disturbed the soil enough that we find a neat
fossil or arrowhead. The leaves are changing color, and my
rose bushes are doing their last hurrah! My fall blooming clematis
has the pergola covered with tiny, white, fragrant blossoms. Penn
State is playing football again, with Joe Paterno at the helm--just
like its been forever. This blog, by design, has lots of
musings in it--I'll be using it at the PAR meetings next week to
show my friends at the CRB meeting how neat blogging is and how it
works.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year
veteran of the real estate industry. Offering training, speaking
and consulting throughout the industry, I teach everything from ABR
to USPAP. Certified ePRO Instructor. To contact me, email me at:
melanie@TheMelanieGroup.com or visit my website:
www.TheMelanieGroup.com
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Date: Sep. 5, 2007
Tags: None
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year
veteran of the real estate industry. Offering training, speaking
and consulting throughout the industry, I teach everything from ABR
to USPAP. Certified ePRO Instructor. To contact me, email me at:
melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
It's September, and the kids are all back in
school. Real Estate Agents typically start thinking about education
this month as well; my teaching schedule is full through December.
If you are a real estate agent, and you are thinking of either
taking courses because you want to, or taking courses because you
have to for CE, I would urge you to get the most 'bang for your
buck'. In my state, some courses are 'three fers'--they count for
broker license credit, CE, and count toward a designation. If you
have to put in 7 or 14 or 28 hours of time, for heaven's sake, make
it count. Take courses that will make you better at your job. Take
courses because you will learn something that will help you make
more money, or serve your clients better. Don't select a course
because it is the cheapest, or you hope the instructor will let you
out early. My top suggestions for agents: decent agency courses,
like ABR and SRS. In this market, clients deserve the best
representation you can provide. A decent financing course--we've
handed over financing details to the mortgage brokers for too long.
You need to understand the process, from qualifying through
closing, and you need to be able to help your client evaluate the
mortgage possibilities they have. Anything on how to value
property, whether it is a beginning appraisal course or a
valuation course for agents. It's tough to value property in a
declining market--go learn how. Finally--it's September--get back
to school!
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Date: Aug. 15, 2007
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The NAR reports are in the news again this week, and it isn't pretty. Nationwide, inventory of used houses stands at about an eight and a half month supply. That's a lot, especially in the parts of the country which experience seasonal slow downs. The lending news continues to spiral downward, with many sub-prime lenders closing their doors; and some heavy hitters (Countrywide) in serious trouble as far as their quarterly earnings and activity go. Around the country, you have people in our industry wringing their hands. Don't sit there wringing your hands--get off your duff and go sell some real estate. Everything is either a threat or an opportunity--and what it ends up being depends more on your perspective than anything else. If you view this market as a problem, it will be a problem. If you view it as an opportunity, it will be one. Here's how this market is an opportunity: if you are an agent, your ranks will thin. In most areas, this happens at the end of the year (connected with dues payments) or the end of the CE cycle (when people decide not to renew their license and go get a 'real' job). So, you already have opportunity, because some of those agents who showed up at the office meetings solely for the donuts will be gone. If you are a buyer, it's a great opportunity. You can now have your pick of listings (in most markets) and you should be able to negotiate a lot of extras. Ask for the seller to pay for your inspections. Ask them to pay some closing costs. Ask for a home warranty. If you are a seller, your opportunity is to be realistic about your house and your market, and to be encouraged by the idea that most of you, after you sell, will also be buyers, and will get a better deal on the next house. If you are a currently listed seller, start looking at the competition--and your house--like a buyer. Be objective. See how you stack up. Fix what you can. Price competitively. Have a home inspection done ahead of time, and address the issues you can. Consider offering a bonus commission, home warranty, rebate for closing costs. Finally, investors should be coming out of the woodwork, but if they aren't, the agents should invite them out. Scan the public ownership records and see who already owns more than one parcel in your market area. These folks are investors. Contact them with your latest 'great deals'. Finally, stay positive. No one is going to buy a house from a Sad Sack that sits around whining about how tough the market is. Remember, as the saying goes: "When the going gets tough...the tough get going." Have a great day!
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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Real Estate, like most businesses, focuses on keeping customers and clients happy and making them customers and clients for life. Most agents agree that they are looking for referrals from existing and past clients and are focused on providing satisfactory service. Yet, many times either we fall short, or, the customer or client has exaggerated expectations that we simply cannot meet. What's a Realtor to do? Part of what you do should be carefully selecting who you will work with as a client. Not everyone who comes your way is good client material--it's just like your Mom always told you--all those potential dates out there might or might not be 'husband or wife' material. Someone who expects you to do something illegal should be off your list--"Only sell my home to people who are (are not) in Group A, B or C". Someone who has unrealistic expectations should be off your list: "I know the average price of a home here in Upscale Estates is $1.5 million, but I need you to find me a motivated seller who will take $300,000 down and finance another $300,000 at 1% for a hundred years". Someone who has exaggerated expectations should be off your list: "We think we will need to view at least 400 homes before making a decision, and we expect you to be available 24/7 until we find the right home". The problem is, most unreasonable people are not this blatant. They start off sounding reasonable and then continue to increase their demands. Here's an inescapable truth: You won't make everyone happy. Here's the second truth: As long as you are honest, ethical and consistently work in your client's best interests, you'll still be able to sleep at night. Much of what happens to make clients unhappy is simply beyond their control--or yours. Early in my career, I had to take a female client who had 'lost it' at a closing into the Ladies room to calm her down. She was angry--at me, at the lawyer, at the lender--but, at the end of the tirade, she was really angry at her soon to be ex-husband and the position he had gotten them into. I got her to focus on the fact that selling the house was one more thing 'off the list' of stuff holding her to the ex. I reminded her that she had hired us to sell her house, and we had done that. She calmed down and went ahead with her closing. More recently, I had a seller client known for being a 'hothead'. Our transaction proceeded smoothly--until on the final walk through the buyer observed what looked like a leak on the furnace (it was). When I called the seller to tell him about the problem and suggest solutions, he went ballistic on me, the buyer, the other agent, and everyone involved. Later, we lined up a plumber to go look at it (after he had verbally abused my husband--also a Realtor--and threatened to 'punch him in the nose' for bringing up the problem). We got the plumber there by agreeing that we, the listing agents, would pay the plumber if there was 'no problem'. Well, there was a problem. The seller paid the bill. He didn't attend closing, and I'm sure he is still out there somewhere, angry (he moved out of state). I did write him after the closing reminding him that he had hired us to sell his home, which we had done (we got more than asking Price for it) and that our job was to resolve problems and take it to settlement. We never got an apology from Mr. 'Hothead'--and we probably never will. Was he happy? No. Could I have made him happy? I don't think so. Could he have been more unhappy? Yes, if we had managed to drop the ball entirely, so he had no closing. So what's my point? Do the best you can--every time, even to the people who probably don't deserve it. Understand that sometimes you will get the fallout from other things going on in your clients' lives. Best of all, know that for everyone who is difficult and unreasonable, there are usually 10-15 folks who are wonderful.
Melanie J. McLane, ABR, CRB, CRS, ePRO, GRI, RAA, SRES, 32 year veteran of the real estate industry. Offering training, speaking and consulting throughout the industry, I teach everything from ABR to USPAP. Certified ePRO Instructor. To contact me, email me at: melanie@TheMelanieGroup.com or visit my website: www.TheMelanieGroup.com
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